Petrol rises 'too much, too soon'

Gull says it has no plans to raise its prices. Photo / Supplied

Pressure is on the big oil companies to reverse their latest price rises after industry small fry Gull announced yesterday it had no intention of following them upwards.

Automobile Association senior analyst Mark Stockdale said increases imposed by the four big companies on Tuesday of 6c a litre for petrol and 4c for diesel were unjustified and should be rescinded.

He endorsed Gull's decision to hold the line after an easing of fuel import costs since Tuesday, and said the big suppliers should have waited before raising their prices for their second time in two weeks.

Their latest increases followed rises last week of 4c for petrol and 2c for diesel, after a stable period in which the companies absorbed cost increases and held their prices over the Christmas-New Year break.

That has meant an increase of 10c a litre on petrol and 6c on diesel since early last week.

Mr Stockdale acknowledged that the suppliers had shown goodwill to motorists over Christmas in the face of rising import costs, but said Tuesday's increases were "too much and too soon" after last week's rises, and noted that the New Zealand dollar remained firm against the US greenback.

"We would have expected the oil companies to have waited until later this week to see whether or not that [import cost] increase was sustained.

"As Gull has shown, that increase has not been sustained - it has actually come back - so with hindsight the oil companies should not have moved that much."

Mr Stockdale said the New Zealand dollar had also risen from 71c to 74c against the greenback since before Christmas, increasing this country's fuel-purchasing power.

"The AA is encouraging the oil companies to review their prices in light of the [cost] reductions this week and the high dollar, and to bring the price back by several cents to reflect current international costs."

Gull New Zealand general manager Dave Bodger said international prices had fallen significantly in the past few days and his company's policy was "not to knee-jerk and extract profit from the customer".

He acknowledged that world oil prices rose by about US$10 ($13.50) a barrel since the week before Christmas to a peak of US$92 ($124.50) by Tuesday for refined petrol and diesel.

But he said prices had since eased by US$4 ($5.42c) for diesel and US$2 ($2.71c) for petrol.

Gull's decision not to increase its prices left most of its regular petrol and diesel 7c a litre cheaper than those of its competitors, and its biofuel 9c below the mark. The big oil companies - BP, Mobil, Caltex and Shell - remained at 175.9c a litre for 91-octane petrol and 113.9c for diesel at most main centre pumps last night.

Shell spokeswoman Jackie Maitland, whose company is generally the first of the big players to reduce prices, said last night that the cost to it of refined fuel had increased by 9 per cent since Christmas Day.

Shell had managed to absorb its costs over the holiday period, before being forced to increase its prices on Tuesday last week, the first business day of 2010.

Ms Maitland would not indicate whether Shell might reverse this week's increases, other than to say the company reviewed its prices daily.

Mobil spokesman Alan Bailey said that although his firm aimed to be competitive at all times, it never flagged its intentions before moving prices.

Spokeswomen for the two other oil majors, BP and Caltex, could not be contacted.

MAJOR PRICES (per litre)

Petrol (91 octane)
Today - $1.76
Six months ago - $1.68
12 months ago - $1.36

Diesel
Today - $1.14
Six months ago - $1.07
12 months ago - $1.04